IPSCO 2006 Annual Report

	2006							2005
	Cost		Accumulated Depreciation			Net		Cost		Accumulated Depreciation			Net
Land and land improvements	$	79,683		$	19	$	79,664	$	57,458		$	—	$	57,458
Buildings	198,486			63,967		134,519		167,152			62,267		104,885
Machinery and equipment	1,572,553			564,042		1,008,511		1,359,063			533,854		825,209
Construction in progress	82,680			—		82,680		64,211			—		64,211
	1,933,402			628,028		1,305,374		1,647,884			596,121		1,051,763
Assets held for sale	8,143			—		8,143		4,423			—		4,423
	$	1,941,545		$	628,028	$	1,313,517	$	1,652,307		$	596,121	$	1,056,186

During 2006 and 2005, $3,145 and $1,098 of interest costs were capitalized. No interest was capitalized in 2004.

Included in machinery and equipment are assets under capital lease with cost and accumulated depreciation of $146,432 and $56,960 (2005 - $146,432 and $48,065, respectively). Amortization of assets under capital lease is included in depreciation expense.

Certain capital assets, which are not employed in production, have been segregated pending their ultimate disposition and are carried at the lower of carrying value and management’s best estimate of fair value less cost to sell. The Company’s valuation includes significant estimates concerning the cost to complete voluntary environmental remediation activities prior to the sale, as well as the ultimate net recovery value of the property. The estimated environmental costs could change depending on the remediation method used. The Company’s estimates of fair value less cost to sell could be impacted by the prevailing economic conditions and the Company’s ability to obtain necessary zoning and other approvals. See Note 9 for discussion of asset sales.